Push him on what kinds of companies, programs, or portfolios the company might target, and Alfieri doesn’t miss a beat. “Strategically, we are most aligned with the traded REITs, on where and why and how we intend to build a portfolio,” he says. “Their growth across the board right now is through development presales, providing equity for developers, bidding on off-market deals, distress opportunities—they are evolving like we are and taking that next step. You won’t see a lot of REITs in open market bids, but when you find a foreclosure, they are chasing you. Like us, they have capital and they are out there.”
On the development end, Behringer Harvard will likely look to establish co-investment relationships with national, brand-name builders to provide equity and debt in projects that result in an ownership stake.
Behringer Harvard
Headquarters: Addison, Texas
Year Founded: 2001
Year First Multifamily Program Launched: 2006
Number of Behringer Harvard Employees: 449
number of Multifamily-Focused Employees: 183
Number of Multifamily Properties: 47
Number of Units Owned and Managed: 13,105
Market Coverage: 13 states, mostly coastal core and high-growth markets
“Having interacted with Mark at both AMLI and Behringer Harvard, I can personally attest to his leadership skills and strong work ethic, which have served to build one of the strongest multifamily investment platforms in the institutional investment universe,” says Charles Brindell, CEO of Dallas-based Mill Creek Residential Trust. “Mark also brings a unique understanding of marketing and operating fundamentals together with a customer-focused appreciation for the needs and desires of the rental apartment customer, which, when taken together, create very strong investment performance results.”
Just like the move toward portfolios, turning on the development engines is a result of pricing and cap-rate compression in core markets. “We’re looking to invest, but we are focused on developers who are familiar to us and have opportunities to stick with our core Class A focus,” Alfieri says. “We’re looking at providing equity and financing for development, but if we see opportunities with land acquisition, we have all developed multifamily in the past, and I think we could do a fair amount of in-house multifamily development in the future.”
All of which positions Behringer Harvard’s multifamily platform alongside its traded REIT peers in portfolio pedigree, operational capability, development brawn, and national scale. It’s an evolution that is likely about halfway complete and one that is deliberately intended to create a fund adaptive and attractive enough to avail itself of any market opportunities that present themselves. “Anything could happen,” Alfieri says. “That’s what is great about the position we are in: I think our portfolio stacks up well against anybody on the traded side, and I still think the public markets are the best long-term execution for an institutional-quality fund in this sector. But I think any institutional investor or pension fund would also love to have a young portfolio like ours with high rent per unit.”
Which is Alfieri’s deliberate way of saying that market adaptation leading to consistent growth and shareholder return presents a universe where the opportunities are endless. You just have to get up every day at 4 a.m. to get there.
